Workplace discrimination claims are at an all time high. In today’s sour economy, small business owners need to control expenses, but Employment Practices Liability Insurance is not the place to cut corners. • The US Equal Employment Opportunity Commission (EEOC) reported that discrimination claims soared 15% in 2008 and workers were awarded $376 Million. • 6 out of 10 employers have faced employee lawsuits within the last five years – That’s 60%! • Businesses are more likely to suffer a financial loss from an employment practices related claim than from a fire.

Employment Practices Liability Insurance (EPLI) coverage provides protection for a company’s liability resulting from sexual harassment, wrongful termination, and discrimination against employees. In addition, EPLI is not just for employees, it provides protection against discrimination and harassment claims made by former employees, potential employees, customers, and guests. These claims scenarios are specifically excluded in a general liability policy, which is why all businesses with employees and/or customers should carry EPLI coverage.

Defense costs – most small businesses do not have the financial resources to retain legal counsel, let alone pay for a costly defense. Average defense cost for an employment practices lawsuit is $45,000. The average settlement is $40,000. Do you have $85,000 cash on hand right now? Okay, so how much? – EPLI policies can be as low as $100/month for small businesses with decent HR practices. If your HR practices aren’t what they should be, your EPLI insurance company, can make recommendations to help you keep your insurance costs down.

The bottom line: If you’re reading this, I can almost guarantee that you know someone who has had an employment practices related incident with their business. In fact, you may have experienced an employment practices situation first hand – if you have, you’re in the majority. If you haven’t, avoid the mindset of “it will never happen to me.”